If you take an early distribution from your IRA for qualified education expenses (avoiding the 10% additional tax), does the brokerage house have to do a mandatory withholding even if client will have no tax due on the amount (low income year)? Thank you!!
Withholding on IRA distributions are optional. If the client wants to have no taxes withheld, then he/she must make that election on the distribution request . If no election is made, the payer is required to withheld 10%.
QUOTE (Appleby @ Dec 21 2007, 02:50 PM) 
Withholding on IRA distributions are optional. If the client wants to have no taxes withheld, then he/she must make that election on the distribution request . If no election is made, the payer is required to withheld 10%.
Thank you Appleby- I thought that was the case but wasn't sure if it applied an early distribution.
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